How Legacy Brands Are Competing With Disruptors

Evolution, not revolution: successful companies are refusing to abandon base customers who provide repeat business at higher margins while at the same time, these enterprises are providing new solutions and channels to entice newer markets. JL


Julie Schlack and Manila Austin report in Advertising Age:

Companies that act more human outperform the market, regardless if they are relative newcomers (Tesla, CrossFit), tech-driven, 21st century brands (Netflix, Amazon), or older brands in traditional industries (USAA, L.L. Bean, Olay, Kraft). Customers still value traditional brands, provided they are careful to evolve with (their) traditional base, not toss them overboard in search of a younger demographic: build new types of relationships, roll out new products and services, and embrace new technologies and ways of thinking.
As any Boomer will tell you, one of the few benefits of aging is that what you lose in speed, you make up for in wisdom. When you can anticipate changing needs and conditions, you don't have to scramble to keep up with them.
Perhaps that's why C Space's latest research indicates that the companies that act more human outperform the market, regardless if they are relative newcomers (Tesla, CrossFit), tech-driven, 21st century brands (Netflix, Amazon), or older brands in traditional industries (USAA, L.L. Bean, Olay, Kraft). The legacy companies on this year's list, in particular, illustrate the importance of marrying heritage with a commitment to constant innovation.
Traditional media companies provide a case study in the consequences of not evolving with empathy for their customers. The media industry, already in a tailspin, wasn't helped by a grueling election cycle, which undoubtedly had many consumers tuning out news in favor of their next Netflix binge-watching session. It's clear that traditional media companies, in an era of partisan and "fake" news, have lost credibility with consumers.
Looking at the 2017 data, the trend is stark: customer sentiment is clearly split between the old and new. With the exception of Disney, a beloved brand buoyed by other parts of its business, the top of the media industry is dominated by tech-driven companies. Traditional broadcast networks and content distributors -- especially those in the news business -- are universally perceived as less intuitive and relevant than their digital peers. And they are feeling the impact on the bottom line, as consumers cut the cord and simply remove these brands from their lives. Despite efforts to build apps, offer streaming content and sustain a social media presence, they are in a catch-up mode. Few traditional media companies have successfully leveraged their experience to evolve alongside customers' changing preferences.
Old but fresh
Meanwhile, heritage brands have managed to thrive by evolving with their customers. For example, L.L. Bean alienated some of its shoppers and faced a boycott in 2017 thanks to board member Linda Bean's public support for Donald Trump (and, in response, the new president's call for people to buy from the company).
How did the L.L. Bean weather that storm? By staying true to its original vision, codified in the company's Golden Rule: "Sell good merchandise at a reasonable profit, treat your customers like human beings and they will always come back for more."
Brands like Olay also demonstrate what happens when companies thoroughly understand and empathize with consumers' evolving needs. Their traditional market -- women over 50 -- was also a price-sensitive one. But women in their mid-30s are old enough to be worried about newly emerging changes to their skin, yet still young enough to have the disposable income to apply to the problem. So the brand reinvented itself by taking a more consumer-centric approach. Olay repositioned its brand to "fight the seven signs of aging" -- a promise that's far more expansive and inclusive. The company has been careful to evolve with its traditional base, not toss them overboard in search of a younger demographic.
What L.L. Bean, and Olay teach us is that you can't consistently anticipate your customers' needs without knowing and growing with them. Customers still value traditional brands, provided they can evolve: build new types of relationships, rollout new products and services, and embrace new technologies and ways of thinking.